* Fall extends 11 percent drop in prices last week
* Japanese data positive but Asian markets stumble
* Analysts sees more corrections for oil prices
(Updates with detail, prices, changes dateline, pvs PERTH)
By Christopher Johnson
LONDON, July 13 (Reuters) - Oil prices fell more than $1 to
below $59 a barrel on Monday, slipping to a seven-week low on
concerns about the state of the global economy as equities
markets tumbled.
Oil prices dropped 11 percent last week in their biggest
weekly decline since late January as investors talked of the
possibility of another dip in economic activity before the onset
of recovery, which could delay a rebound in demand for fuel.
Crude oil for August delivery <CLc1> was down 50 cents at
$59.39 by 0748 GMT, after earlier falling $1.01 to a low of
$58.88. London Brent <LCOc1> fell 35 cents to $60.17.
"Economic concerns are continuing to weigh on oil prices.
The rally we saw last month was clearly overdone," said Daniel
Liu, an energy strategist at MF Global Singapore Pte Ltd.
"We believe oil prices will see a further correction to fall
to around $55, before they bounce up when confidence on the
global economy returns to the market."
Oil shot up 40 percent last quarter and touched an
eight-month high of above $73 a barrel as investors shrugged off
weak fundamentals and banked on swift global economic recovery.
But a recent slew of bearish data around the globe, which
suggested that some of the world's largest economies were still
struggling, prompted a sell-off in both oil and equities.
JAPANESE CONFIDENCE RISES
European shares hit an 11-week low on Monday, led down by
banks and miners as worries over company earnings forced
investors to scale back trading positions. The FTSEurofirst 300
<> index of top European shares was down 0.9 percent at
807.34 points by 0712 GMT.
Oil fell on Monday despite data showing Japanese consumer
confidence improved in June and a measure of companies' capacity
utilisation rose for May, indicating the world's third-largest
energy consumer may be past the worst of its deepest recession
since World War two. []
Analysts said oil would continue to track equities markets
in the short term. And with Wall Street's rally stalled, this
week could be crunch time as big banks' earnings, including
Citigroup's <C.N>, roll in and investors scrutinise reams of
economic data for clues on the recovery. []
Key economic data from China, including gross domestic
production in the second quarter, industrial output and retail
sales, due to be released on Thursday, will also be keenly
watched by investors. []
Analysts at BNP Paribas said oil prices could see more
corrections in the short term as external factors which have
helped oil's recent rally, including a weak U.S. dollar and
rising equities, are set to reverse course.
"Focus will shift back to oil fundamentals which remain weak
-- oil demand will contract with the world economy, and OPEC has
a large inventory hurdle to overcome," BNP's Harry
Tchilinguirian said in a report.
Investors have also been made cautious by U.S. government
moves to reign in speculation in energy and metals markets,
while the Commodity Futures Trading Commission could have new
regulations in place by late October. []
[]
In Nigeria, a top rebel leader is expected to be freed early
this week, his lawyer said on Sunday, but analysts said his
release might not lead to a significant drop in militant attacks
in Africa's biggest oil sector. []
(Additional reporting by Fayen Wong in Perth; editing by Keiron
Henderson)
